NKE: Loss to the Little Guy

Nike caved-in, allowing 7 of its athletes to wear the controversial Speedo LZR swimsuit if they choose to at the US Olympic trials (Speedo is about 8% of WRC cash flow). This is very un-Nike-like. Those following Nike for a while and can think back to the 1992 Olympics in Barcelona when Jordan draped an American Flag over the Reebok Logo on his uniform as a sign of brand loyalty. Nike is a fierce competitor. It does not like to lose, and it likes its competition even less.

Is Nike getting soft by allowing another brand onto its turf? Not quite. Think about the PR decision tree. Nike got beat on this one. There's no way around that. Now Nike says that it is allowing its athletes to wear competing product without any 11th hr corporate pushback so that its athletes can compete without distractions. If Nike instead were to hold its ground and the athletes lose, then Nike looks bad. If Nike flexes and the athletes win, Nike is the good guy by supporting its athletes. If the athlete loses in a non-Nike product, then that fuels Nike's fire.

Is this the optimal strategy? No. It is Nike playing defense. Nike's never been too good at defense. In fact, when Nike is on defense it just makes them plain 'ol angry. Yes, this could give Speedo a bump in sales over the next quarter (likely not enough to be a financial boost to WRC). But I would not want to be in their suit 12 months out...

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